Yes, you can sell a Minnesota rental with tenants living in it. When a landlord sells, the lease generally passes to the buyer, who becomes the new landlord and has to follow the lease as written unless both sides agree to change it. You still owe tenants proper notice before anyone enters, and their security deposits must be transferred or returned. This is a summary of the rules, not legal advice.
Does the lease survive when I sell?
Generally yes. The Minnesota Attorney General's landlord-tenant handbook says that when a landlord sells the property in a regular sale, the lease transfers to the new owner, who becomes the landlord. The new landlord must follow the lease that existed between the old landlord and the tenant, and the terms change only if both parties agree (Minnesota Attorney General, Entering into the Agreement). A fixed-term lease keeps running to its end date. A buyer can't simply cancel it because the house sold.
What is different for month-to-month tenants?
A month-to-month tenancy has no end date, so the buyer takes it over the same way, but either side can end it with written notice. Minn. Stat. 504B.135 says the notice must be at least as long as the interval between rent payments or three months, whichever is less. The Attorney General's handbook adds that, absent other terms in the lease, a landlord's written notice must be given before the start of the last rental period, and a late notice does not work (Ending the Tenancy). Cities may add their own rules, and the statute was amended in 2023, so confirm the current rules with an attorney before relying on any date.
| Fixed-term lease | Passes to the buyer and runs to its end date on the same terms. |
|---|---|
| Month-to-month | Passes to the buyer. Ending it needs written notice, generally one full rental period (3 months at most). |
| Security deposit | Must go to the new owner or back to the tenant, within 60 days after your interest ends. |
| Showings and entry | At least 24 hours' notice, between 8 a.m. and 8 p.m. unless the tenant agrees otherwise. |
What notice do I have to give before someone comes in?
Minn. Stat. 504B.211 lets a landlord enter for a legitimate reason, including showing the unit to prospective buyers. The landlord must make a good-faith effort to give notice at least 24 hours ahead, with a time or time window, and entry is limited to 8 a.m. to 8 p.m. unless landlord and tenant agree otherwise. A tenant can't be made to waive the notice right. Entry without notice is allowed only for things like an emergency. Violations can cost the landlord a rent reduction, a civil penalty of up to $500 per violation, and attorney fees.
With me, there are no open houses and no string of strangers. I come see it once, at a time that works for the tenants.
What happens to the security deposit?
Under Minn. Stat. 504B.178, the former landlord must either transfer each deposit to the new owner or return it to the tenant, and doing either ends the former landlord's liability. The new owner takes on the landlord's duties for that deposit. If the deposit is transferred, the tenant must be told the new owner's name and address. The deadline is 60 days after the landlord's interest ends. Missing it can mean paying the tenant a penalty on top of the deposit and interest, and deposits earn 1 percent simple interest per year.
How does a sale with tenants usually go?
- Gather the lease, rent roll and deposit records for every unit.
- Give tenants proper entry notice for the walk-through.
- Get a written offer. Tenants in place are OK with me.
- Decide how deposits transfer and tell tenants who their landlord is after closing.
- Close at a title company on your date.
Is a duplex different?
The rules above apply per unit, so a duplex with two tenants means two leases, two deposits and two entry notices. I buy duplexes. I bought and redid a St. Paul East Side duplex (both units were packed with belongings when I bought them). In St. Paul, a sale of a one- or two-unit house also triggers a Truth-in-Sale-of-Housing report, covered in the TISH guide.
Tenant moved out and left things behind?
Minnesota has rules for property a tenant leaves behind, and I clear rentals once those are met. See cleanouts for landlords.
Do tenants have to be out for a cash sale?
No. With a lease in place the tenants keep their rights. If you'd like the house vacant at closing, that is a separate talk with your tenants, best done with an attorney, and some tenants may accept an agreement to leave early.
If you're a landlord tired of the house, send me the address and tell me about the tenants, and I'll give you an honest cash offer, or an honest "keep it" if that math is better for you. If a tenant left a mess, ask for a cleanout quote.
Sources
- Minnesota Attorney General: Landlords and Tenants handbook, Entering into the Agreement
- Minnesota Attorney General: Ending the Tenancy
- Minn. Stat. 504B.135, termination of tenancy at will
- Minn. Stat. 504B.211, landlord entry
- Minn. Stat. 504B.178, security deposits
- City of St. Paul: Truth in Sale of Housing